Food processing plays a crucial role in increasing farmers' income by adding value to raw agricultural produce, reducing post-harvest losses, and opening new market opportunities. Recognizing its importance, the Ministry of Food Processing Industries (MoFPI) has launched several schemes to support the sector, especially in rural and underserved areas. These initiatives aim to improve food production, minimize wastage, and create better market opportunities for farmers by providing financial, technical, and business support for food processing infrastructure.
By strengthening post-harvest systems and processing capabilities, these efforts ensure reduced food wastage, increased availability of processed foods, and greater value retention for farmers. Additionally, they promote job creation in rural areas and address inefficiencies in the supply chain. Ultimately, the goal is to foster a more sustainable and profitable agricultural ecosystem where farmers receive fair value for their produce.
Key Schemes for Food Processing Industry Development
1. Pradhan Mantri Kisan SAMPADA Yojana (PMKSY)
PMKSY is a flagship scheme aimed at promoting the growth of the food processing sector. Under this umbrella scheme, the Ministry provides financial assistance to entrepreneurs for setting up food processing industries. This includes grants of up to Rs 15 crore for projects in general areas, with 35% of the eligible project cost covered, and 50% of the eligible cost for projects in difficult areas, SC/ST communities, FPOs, and SHGs. PMKSY consists of several component schemes designed to create modern infrastructure and improve supply chain management from farm gate to retail outlet.
Component Schemes of PMKSY:
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Integrated Cold Chain and Value Addition Infrastructure (Cold Chain scheme): Aims at reducing post-harvest losses and providing better prices to farmers.
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Operation Greens (OG scheme): Focuses on long-term interventions to improve the vegetable supply chain.
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Creation of Infrastructure for Agro-Processing Clusters (APC scheme): Enhances food processing capabilities in clusters.
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Creation/Expansion of Food Processing & Preservation Capacities (CEFPPC scheme): Expands food processing units to increase capacity.
Impact of PMKSY:
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Under PMKSY, a total of 1,145 projects have been approved across various component schemes, with a total approved grant-in-aid of Rs. 4,746.89 crore. The schemes include Agro Processing Clusters with 75 projects approved (Rs. 194.04 crore), Creation of Backward and Forward Linkages with 61 projects (Rs. 143.31 crore), and Integrated Cold Chain and Value Addition Infrastructure with 397 projects approved (Rs. 2,108.02 crore).
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Other schemes include the Creation/Expansion of Food Processing & Preservation Capacities with 526 projects (Rs. 1,083.84 crore), Mega Food Park with 41 projects (Rs. 1,175.27 crore), and Operation Greens with 45 projects (Rs. 42.41 crore).
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Specifically, under the Integrated Cold Chain and Value Addition Infrastructure component of PMKSY, 397 projects have been approved, out of which 286 projects have been completed. These projects have contributed to the creation of a processing capacity of 112.35 Lakh MT per annum and a preservation capacity of 25.39 Lakh MT per annum.
2. Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)
PLISFPI aims to support the creation of globally competitive food manufacturing champions. This scheme seeks to boost Indian food brands in the international market by offering financial incentives for setting up or expanding food processing units. The scheme is operational from 2021-22 to 2026-27, with an outlay of Rs. 10,900 Crore.
3. PM Formalization of Micro Food Processing Enterprises (PMFME)
Another important initiative is the PMFME scheme. It focuses on the development and upgradation of micro-food processing enterprises, especially in rural areas. Under this scheme, entrepreneurs are provided financial, technical, and business support for setting up or upgrading micro food processing units. The PMFME scheme has an outlay of Rs. 10,000 Crore and is operational until 2025-26.
Cold Storage and Cold Chain Infrastructure
One of the most vital components in ensuring efficient food processing is the development of cold storage and cold chain infrastructure. The Ministry of Food Processing Industries has been implementing the Central Sector Scheme for Integrated Cold Chain and Value Addition Infrastructure under PMKSY to address this need. The goal of this scheme is to reduce post-harvest losses of both horticultural and non-horticultural produce and offer better prices to farmers.
Key Features of the Cold Chain Scheme:
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Financial assistance: 35% of the eligible project cost in general areas and 50% in difficult areas, SC/ST communities, FPOs, and SHGs.
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Maximum grant: Up to Rs 10 crore per project.
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Support for integrated cold chain systems, including storage, transportation, and preservation facilities.
The scheme operates on a demand-driven basis, with project proposals invited through Expression of Interest (EoI). By reducing food wastage and ensuring better price realization, cold chain infrastructure significantly boosts farmers’ incomes and enhances overall food processing capacity.
Support for Horticulture and Cold Storage Development
Mission for Integrated Development of Horticulture (MIDH)
The MIDH, implemented by the Department of Agriculture & Farmers Welfare, provides capital assistance for cold storage construction, expansion, and modernization.
Key Features of MIDH:
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Financial support: Credit-linked back-ended subsidy.
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Assistance rate: 35% in general areas and 50% in hilly or scheduled areas.
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Eligible capacity: Cold storages up to 5,000 MT.
Special Assistance for North East and Himalayan States
For food processing projects in North Eastern and Himalayan states, the government offers 50% credit-linked back-ended assistance on eligible project costs, with a maximum limit of ₹800 lakh per unit. This initiative helps overcome the unique geographical and infrastructural challenges faced by these regions.
For government schemes to realize their full potential, effective implementation and grassroots awareness are essential. Seamless integration between farmers, processing units, and cold storage facilities is key to maximizing their impact. Ensuring that financial and technical assistance reaches the intended beneficiaries without hurdles will empower rural and smallholder farmers, enhancing productivity and profitability.
Administrators and policymakers play an important role in streamlining application and approval processes, ensuring these initiatives are easily accessible while minimizing delays. Simultaneously, agri-startups must lead the way in developing innovative solutions that provide small and marginal farmers with essential resources, advanced technologies, and robust market linkages. These strategic efforts will help reduce post-harvest losses, enhance value addition, and improve farmers' incomes.
By effectively leveraging these schemes, fostering innovation, and addressing on-ground challenges, India’s food processing sector can become a catalyst for rural prosperity. Strengthening market infrastructure, promoting technology-driven interventions, and ensuring seamless supply chain integration will not only minimize food wastage but also position India as a leader in the global agri-market. A well-connected, resilient, and inclusive ecosystem is key to building a more sustainable and profitable future for Indian agriculture.
